Solo quant trading

Not in real estate, currently a math student

Theoretically, is it realistically even possible for one person to start there own prop trading firm?  I understand this would mean identifying a strategy, algo development, backtesting, going live, managing risk, and continuous research.  Lets assume AUM is tiny (~$5mm).  Would it even be possible for one person to do all of the above?

Comments (11)

  • Intern in RE - Comm
Jan 22, 2021 - 10:41am

wasn't thinking about this in the short term.  I was wondering how difficult it would be to do later in my career should the opportunity arise

Jan 22, 2021 - 9:56am
faceslappingcompilation, what's your opinion? Comment below:

why do you need a "prop trading firm" ?

if you are just an individual, regardless of how much $$ you are trading (and 5mm is small in this world), just open up a brokerage account with a firm that lets you access the broker API (application programming interface) and trade your own account.

checkout Interactive Brokers and see if they offer what you need.

just google're welcome
  • Intern in RE - Comm
Jan 22, 2021 - 10:42am

I mean if the opportunity arose one day down the line, would it be possible to start one on my own with the goal of building into a real firm.  I didn't mean to set up the prop trading firm structure just to trade on my own.  Appreciate the response nonetheless!

Jan 22, 2021 - 10:58am
faceslappingcompilation, what's your opinion? Comment below:

there are 4 reasons to start a firm, rather than just invest yourself or join an existing firm.

1) you aren't a good trader yourself

2) you are an ok, trader, but your real talent is identifying and nurturing other good traders (this was Izzy at Millenium)

3) your strategy has maxed market capacity for your AUM, and you want to add more strategies to manage that excess capital (Ken at Citadel)

4) you are really good at raising capital from investors

of course anybody can "start a firm" but if you don't have the talent / ability to raise outside capital....why would you?

just google're welcome
  • 1
Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
  • Quant in HF - Other
Jan 22, 2021 - 6:13pm

Yes it is. It is definitely possible to trade US equities with daily rebalance alone given the right chops and experience. I would estimate that in the case of building everything single-handedly it would require 6-12 months of development and max capacity (GMV) of 50-100 mills. Beyond that it requires building out a team or using an already developed infra. However, it is hard.

Jan 23, 2021 - 12:33am
donloki, what's your opinion? Comment below:

I think the more important question is what level of "experience" required to be able to do this. Working in a more established firm will help you learn the whole process (assuming that firm is not silo-ed), which would help you bypass all the time you need to learn and explore on your own. 


  • Quant in HF - Other
Jan 23, 2021 - 4:51am

At this point it is more about experience than education. However, having the right advanced education helps to understand inner workings of required algorithms slightly better than competition, which could lead to a major increase to the longevity of operation. 

Most Helpful
Jan 23, 2021 - 2:22am
ltvthreexcac, what's your opinion? Comment below:

Go read the introduction to de Prado's book Advances in Financial ML. Then read the introduction to ML for Asset Managers. It is extremely difficult - even to determine whether or not your strategy actually works; there are many ways to screw up backtesting. I worked in a research lab and we concluded it wasn't worth the time we were spending - that's how hard it is.

Yes you could come up with something unique. Yes it might actually work. It's just that the chance of that is very low if not infinitesimal, especially if you are only working with publicly available data (most papers published in the discipline are actually false positives, for example).

  • Intern in RE - Comm
Jan 23, 2021 - 12:02pm

Doloremque sint eaque consequatur. Cupiditate sit soluta debitis tempore. Quis consequatur illum qui porro.

Quas asperiores tempora omnis eaque. Qui earum quisquam voluptatum a. Voluptatem earum blanditiis nisi dolor commodi modi deserunt. Velit ut esse consequatur.

Sunt vel ex qui nemo aut. Officiis omnis molestiae et odit voluptatem. Est quisquam cumque laboriosam consequatur qui. Excepturi libero quaerat aliquid. Debitis repellendus eaque asperiores maxime sit culpa.

Start Discussion

Career Advancement Opportunities

September 2022 Investment Banking

  • Jefferies & Company (▲05) 99.6%
  • Lincoln International (= =) 99.2%
  • Bank of America Merrill Lynch (▲04) 98.8%
  • Financial Technology Partners (+ +) 98.5%
  • Evercore (▽02) 98.1%

Overall Employee Satisfaction

September 2022 Investment Banking

  • Jefferies & Company (▲12) 99.6%
  • Greenhill (▲07) 99.2%
  • Evercore (▲02) 98.8%
  • PJT Partners (▽02) 98.4%
  • Macquarie Group Limited ABN (▲21) 98.1%

Professional Growth Opportunities

September 2022 Investment Banking

  • Jefferies & Company (▲05) 99.6%
  • Lincoln International (▲03) 99.2%
  • PwC Corporate Finance (▲12) 98.8%
  • Bank of America Merrill Lynch (▲05) 98.5%
  • Houlihan Lokey (▲05) 98.1%

Total Avg Compensation

September 2022 Investment Banking

  • Director/MD (10) $613
  • Vice President (38) $392
  • Associates (210) $257
  • 2nd Year Analyst (131) $163
  • 3rd+ Year Analyst (19) $160
  • 1st Year Analyst (440) $151
  • Intern/Summer Associate (83) $150
  • Intern/Summer Analyst (319) $93